Passenger carriers have vehicles. Passengers have trips. Matching them creates business.
The modern business model uses software and technology to create business transactions for everything from pizza delivery to cab rides.
A variation, “crowdsourcing,” attempts to aggregate a lot of people interested in traveling to the same place at the same time — enough to fill a bus, for example.
“We have two concepts,” said Axel Hellman, transportation planner for OurBus. First, he said, “We are a platform that helps people crowdsource commuter bus routes. If there are a lot of people who want to set up a transport service, they pull together on our site. If it reaches the point that the route is feasible, we match it up with a charter company.”
Second, Hellman said, “We give the buses the technology to do multiple lines of business at once.”
Crowdsourcing could assume a growing portion of the business of the motorcoach industry, said Tom McCaughey, president of Flagship Trailways in Cranston, R.I.
For three years he has been fielding motorcoaches for event-based trips arranged by Rally, the New York City-based “crowdpowered travel” provider.
“It’s the world we live in today. I guess you’d call it the shared economy,” McCaughey said.
“When I was a kid, the most important thing in the world was getting a driver’s license. My kids drive, but they also ride the bus and ride the train. We have a lot of young Millenials riding buses.”
Flagship Trailways has filled up to eight coaches for Rally trips to major music concerts and sporting events in the northeastern U.S. It also contributed eight of the 800 buses, supplied by 135 operators, that Rally crowdsourced for the Women’s March on Washington in January. Those coaches carried 48,000 women.
“I have three buses going to the New England Patriots game Sunday through Rally,” McCaughey said. “It’s really interesting to watch it happen. We can log on to see the number of passengers and watch it grow. Those are seats that are booked and paid for.”
Pre-selling seats to the big game is one thing. Assigning equipment to daily commuter runs is another.
OurBus, based in New York City, arranges commuter service to New York City from outlying suburbs.
“The difficult thing about commuter routes is that you go in-bound in the morning then out-bound eight hours later,” Hellman said.
The OurBus solution is helping those carriers fill runs from New York City to Washington, D.C., and back during the mid-day hours that otherwise would be down time.
The “Request-a-Route” page on the OurBus website “allows commuters to create their own dedicated, efficient bus routes. To actually start the service on the route, we need to find a busload of commuters who have a similar trip in mind. This usually is about 75 to 100 people.
“We need many more people to sign up for the route than we need to fill the seats,” Hellman said. “Some people aren’t commuting every day. On the other hand, there are probably more commuters than we will have signed up.”
OurBus has been in business for a year and a half and has worked with 10 to 15 carriers. Some have not been booked on a regular basis, Hellman said.
OurBus lists seven inbound and outbound commuter runs connecting Livingston and West Orange, N.J., to the New York Port Authority Bus Terminal. Two schedules link Montgomery Township and Kendall Park, N.J., to the Grand Central Terminal in New York City.
Passengers also can book tickets with OurBus for rides between New York City and Washington, D.C., as well as several cities between them.
The crowdsourcing commuter model could work in many major cities, Hellman said.
“Anywhere there is a large number of long-distance commuters who are not well-served, it could work,” he said. “For commuter routes, we want to get as close as possible to people. Even if we are charging the exact same fare as a bus or train five miles from them, we save them time and money. They don’t have to pay for driving or parking.”
Another service linking intercity bus routes with riders is ilikebus.com, a sister company to information technology developer United Bus Technology.
“We partner with 15 bus operators that travel all over the East Coast. We have about 100 destinations and over 400 daily scheduled runs,” said Tingting Guo, general manager of ilikebus of McLean, Va.
Passengers using ilikebus for booking can find a bus running the New York-Washington, D.C., route almost every hour, she said. Online ticketing increases passenger convenience and sometimes gives bus operators enough advance notice to add a bus to a busy route.
“Before we came to the market, the bus companies were selling their tickets at the station. Many times in the holiday season the seats are sold out after the customer traveled a long way to the bus station, so they are told they have to come back tomorrow,” Guo said. “With the online ticket service, they can purchase their ticket in advance and have their seat guaranteed.”
She said the online books can alert operators to customer demand that warrants an additional bus on a scheduled trip. “That happens a lot during the holidays.”
Some OurBus routes leave the Northeastern states and head to Atlanta and Florida. It also offers routes within Florida.
Rally Bus, based in New York City, launched its business by crowdsourcing groups for travel to sporting and entertainment events. Its website boasts of 640,535 seat reservations to 3,245 cities.
“We have expanded to charters and commuting,” said Numaan Akram, founder and chief executive officer of Rally. “Our current commuter routes are minimal as we are in ‘stealth mode’ for that service. Additionally, we are piloting projects with communities in Alabama and Wisconsin.
“In Alabama we have created a bus pooling service for employees. We have access to employee home addresses so we can create optimal routes. The employer subsidizes the service as a benefit as it helps with retention and the transportation issues that low-income workers face,” Akram said.
“In Wisconsin, the goal is to get urban dwellers out to the suburban office parks. This can be the young and upwardly mobile who are flocking back to the cities as well as lower-income warehouse workers.”
Ford Motor Company bought into the crowdsourcing transportation business last year when it purchased a San Francisco start-up called Chariot for $65 million. The company fields more than 200 14-passenger Ford Transit vans in San Francisco and recently expanded to Seattle and Austin, Texas. It plans to put 60 vans on the streets of New York City this fall.
Chariot CEO Ali Vahabzadeh refers to the company’s business model as “micro-transit” and describes it as supplementing existing options with flexible, fluid routes that can respond quickly to customer needs, such as service delays on existing transit lines. Chariot said it will consider a new route if it is endorsed by 49 potential riders.
Is crowdsourcing creating new passengers or competing with motorcoach operators and transit agencies for existing passengers?
“It is largely both,” Hellman said. “Even if we create a new service where there wasn’t one, it is going to be taking people away from whatever they were doing before.”
As for his business, crowdsourcing has been an adjunct, said McCaughey of Flagship Trailways.
“So far I don’t feel threatened by it. I don’t see them taking people off somebody else’s bus. I see them putting people on a bus.”
He added, however, that he doesn’t offer commuter service. “I have a lot of colleagues that do. I have heard from some commuter services or line carriers that they do feel threatened (by crowdsourcing).”
The presence of motorcoach-grade equipment on commuter runs does differentiate OurBus service for riders familiar with public-transit-quality buses, Hellman said.
“Their motorcoaches probably don’t have fare boxes, but we provide mobile ticketing and payment. It makes it easy for bus companies to enter intercity or commuter routes.”
The OurBus website posts pictures of motorcoaches carrying the company logo. However, Hellman said, “We don’t own or operate buses. We are a broker. Some of the companies that work with us have wrapped their buses with our logo.”
Some past efforts by third parties offering ticket sale and passenger aggregation services did not go well as bus operators found reimbursement lacking after trips had been completed. In the online age of payment at booking, financial transactions should be more streamlined, providers said.
“Payment from riders is collected via our app or website,” said Hellman of OurBus. “Operators don’t have to install fare boxes or set up their own system to collect tickets. That is especially important if they are a charter provider with no line runs. Exact payment cycles depend on our contracts with individual companies.”
Providers of service through ilikebus typically are paid on a monthly basis, said Tim Wilson, director of business development at sister company United Bus Technology. “We have a contract with each company and they can select the option for how we do payments to them,” Wilson said. “We come from a motorcoach background and realize cash flow is important. We usually settle up at the end of the month for transactions that month.”
Akram said Rally pays ahead of time and directly. “Once an operator has become preferred (a favored provider) we use direct bank transfers to avoid credit card fees.”
Crowdsourcing bus travel has been done in Europe for quite some time and has been pretty successful, said Craig Smith, chief executive officer of Martz Group, a 200-coach operator in Wilkes-Barre, Pa.
“It is just making its way here and it is too early to tell what will happen, but at this point it seems to be something customers are looking for,” he said.
Martz Group operates “a few little commuter runs in the outlying suburbs of New Jersey” through OurBus, Smith said.
“They are able to set routes by letting people tell them where they want to go other than us just establishing runs. We may be getting a new source of customers. Maybe it is simply educational — getting some of the general public who just don’t know about buses.”